Over the past two years, the availability of flex office space in the UK has steadily increased, with new offerings from workspace providers resulting in 5.5 million sq ft of space now available, leading to a softening of prices, particularly in London, according to the 'Flexible Office Space Report' from Rubberdesk, the online flexible office marketplace.
Rubberdesk's report also highlights that, despite a slight increase in desk rates to £300 per desk (excluding London), which is 2.4% higher than the Q3 2022 low, desk rates remain 31% below pre-pandemic levels due to market uncertainty.
In Q4 2022, desk rates for flexible office space in London fell 1% Q on Q to £630 per desk per month, while vacant space climbed 16.8% to 4,166,200 sq ft due to new inventory from premium brands. Although some pockets of London have seen rates rise, the long-term trend has been steadily downward.
The report highlights that almost half of the available flex office space has 10 or fewer desks and typically serves businesses of 10 to 20 staff. The median rate for this segment is £599 per desk, while spaces for larger teams requiring between 50 and 400 desks are priced at around £700 per desk due to extra amenities and private breakout spaces.
Desk rates in locations outside of London are significantly more affordable, with rates as much as 67% cheaper. Manchester offers desk rates at £383 per desk, while Cardiff rates are as low as £205 per month. In Scotland, Glasgow offers private office desks at £352, while in Aberdeen and Edinburgh, the rate is £300.
The report suggests that the growth in the UK flex office market will continue in the coming year, driven by businesses seeking agile workspaces to accommodate changing needs. However, challenging market conditions will keep prices subdued.
Rubberdesk Co-Founder Jim Groves said, "While London has seen prices recover, rate changes across the rest of the UK have been a bit of a mixed bag. Markets such as Leeds and Newcastle have recovered and moved past the pandemic, others like Manchester & Birmingham have only seen glimpses of improvement, with prices remaining well below pre-pandemic rates."